Metal Traders Sitting Tight

Tuesday morning markets are fairly quiet as traders continue to watch events unfold in the Ukraine, where more aggressive military action seems to be in all the headlines. Russia’s Putin in public says he wants diplomacy and not military action but behind the screens is trying to cower the governments and its citizens with discreet aggression.  Gold traders remain fairly calm with the metal trading at 1343.30 this morning with only a $1.80 cent increase but well below its high last week of 1351.00. Silver also is following cues from gold holding at 20.985. Platinum and palladium after close to flat, trading at 1479.35 and 776.50 respectively. Precious metals recovered from early losses to edge higher on Monday as support from the standoff in Ukraine offset pressure from last week’s strong U.S. payrolls data and weakness in other commodities after a sharp drop in Chinese exports

On Monday gold was trading on with negative sentiment. However, sharp downside in the prices was prevented due to rise in gold ETF holdings by 0.9 percent to 812.70 tonnes managed under SPDR Gold Holdings Trust.

The prices of gold and silver moved in an unclear trend during last week. Their prices started off strong at the beginning of the week only to change course and plunge at the end of the week. Several U.S reports may have contributed to movement of precious metals: Non-farm payroll report showed a 175k increase in jobs during February manufacturing PMI increased by 1.9 percentage points to 53.2. Finally, jobless claims fell by 26k to reach 323k. In the forex market, the euro, and Aussie dollar rose against the USD, while the Canadian dollar and Japanese yen depreciated. This mixed trend may have also contributed to the recent changes in the prices of gold and silver. The price of gold increased by 1.26% last week; moreover, during last week, the average price reached $1,343.70 which was 0.84% higher than last week’s average rate. Gold ended the week at $1,338.2. The price of silver declined by 1.46%; further, the average weekly rate was $21.28, which was 1.32% below last week’s price.

Copper traded in the red most of Monday and this morning recovered 12 points to trade at 3.0540. Industrial metals hit an eight-month low on Monday and Shanghai contracts dropped by their 5 percent daily limit, fanned by fears over the unwinding of copper finance deals in China after its first domestic bond default last week. Copper inventories in warehouses monitored by the Shanghai Futures Exchange rose 4.6 percent from last Friday, the exchange said on Friday. Base metals on the LME traded on a mixed note yesterday on the back of concerns of slowdown in growth in China after unfavorable data from the country last week. Also, mixed inventory data could not provide proper direction to prices.  However, strength in the DX coupled with mixed global market sentiments kept a check on gains. Copper prices slumped by more than 1 percent yesterday taking cues from growth concerns in the world’s biggest consumer, China after weak economic data from the country. Additionally, mixed economic data from eurozone acted as a negative factor.